Northern Ireland economy: Post-Covid recovery 'may have peaked'

Northern Ireland's post-Covid economic recovery may have peaked with a survey suggesting business activity began to contract in May.

Every month Ulster Bank surveys a representative sample of companies.

The survey suggests that in May construction and retail saw a significant fall in overall activity.

The bank's chief economist, Richard Ramsey, said it was the first time in 14 months that overall business activity had fallen.

Non-retail services and manufacturing saw continued growth, but new orders began to weaken.

Mr Ramsey said the "significant declines" in retail and construction had outweighed continued growth within the manufacturing and services sectors.

"The cost-of-living crisis is making its presence felt, particularly on retail, with both sales and new orders slumping in May," he said.

"Construction remains mired in an order book recession with last month's steep decline marking the eleventh successive month of contraction."

He added that the overall outlook was for things to get worse, with new orders falling at their fastest pace since February last year.

Last week Danske Bank sharply downgraded its forecast for the performance of the Northern Ireland economy in 2023.

It expects growth in 2023 to be just 1%, having previously forecast 1.7%.

The bank's chief economist, Conor Lambe, said higher inflation and economic uncertainty would be a brake on growth.

He still expects growth of 3.6% this year, though most of that reflects a strong performance in the earlier part of the year.